KNCCI Warns Tobacco Bill Could Increase Costs, Fuel Illicit Trade

The Kenya National Chamber of Commerce and Industry (KNCCI) has raised concerns over proposed changes to Kenya’s tobacco control laws, warning that some measures contained in the Tobacco Control (Amendment) Bill, 2024 could increase compliance costs for businesses and worsen the country’s growing illicit cigarette trade.

In a memorandum submitted to the National Assembly Committee on Health, the business lobby said it supports efforts aimed at protecting minors from accessing tobacco and nicotine products. However, it cautioned that several proposals in the Bill may create overlapping regulations and operational uncertainty for businesses already navigating multiple licensing requirements.

According to KNCCI, introducing additional registration and licensing obligations for tobacco dealers could place a heavy burden on businesses operating within the formal economy, particularly micro, small and medium-sized enterprises (MSMEs).

“The Chamber’s position is that regulating the same commercial activity through parallel approval regimes risks duplication, increased compliance cost, and fragmented enforcement across multiple authorities,” KNCCI stated.

The Chamber further warned that excessive regulation could discourage formal business operations while giving an advantage to non-compliant and illicit traders.

The concerns come amid rising cases of counterfeit and smuggled cigarettes in Kenya, with industry estimates showing illicit tobacco products accounted for nearly 47 percent of cigarette consumption in 2025, up from 37 percent the previous year. The illegal trade is estimated to be costing the government approximately Sh12 billion annually in lost tax revenue.

Read: Senate Urged to Rethink Tobacco Bill as Traders Predict Surge in Illicit Goods

Authorities have also intensified enforcement efforts targeting contraband tobacco products. Earlier this year, the Kenya Revenue Authority, working alongside the Anti-Counterfeit Authority and other agencies, intercepted more than 9.3 million illegal cigarette sticks valued at Sh281 million at the Port of Mombasa.

KNCCI argued that tobacco retailers are already subject to county licensing frameworks, tax compliance obligations and sector-specific regulations, making additional approval systems potentially duplicative.

The business lobby urged lawmakers to integrate retail oversight into existing county licensing systems, particularly the Unified Business Permit framework, while reserving national licensing requirements for manufacturers and importers already regulated under excise laws.

The Chamber also objected to proposals seeking to ban single-use plastics associated with tobacco and nicotine products, saying Kenya already has environmental compliance mechanisms under Extended Producer Responsibility (EPR) regulations.

According to KNCCI, introducing plastics restrictions through tobacco legislation could create regulatory overlap and disrupt supply chains.

Additionally, the organization expressed concern over provisions prohibiting the sale of tobacco and nicotine products within a 100-metre radius of premises mainly serving persons under 18 years.

KNCCI argued that such restrictions may disproportionately affect traders in densely populated urban areas where schools, businesses and residential spaces are closely situated.

The Tobacco Control (Amendment) Bill, 2024 is currently under parliamentary review as lawmakers seek to strengthen regulation of tobacco and nicotine products amid growing public health concerns, particularly around youth access and emerging nicotine alternatives.